Deaton believes Ripple will want to settle with the SEC even after winning the lawsuit.
Following reports of a possible settlement in the SEC vs. Ripple lawsuit, some XRP community members seek clarifications to a recent legal analysis by CryptoLaw founder attorney John E. Deaton.
Deaton Debunks Settlement Rumors
For context, attorney Deaton recently debunked a settlement rumor currently making the rounds in the XRP community. According to a tweet from crypto news outlet Blockchain Daily yesterday, the settlement between SEC and Ripple is reportedly scheduled for May 8.
However, attorney Deaton believes the report is false. He opined that there would only be a settlement in the lawsuit after Judge Analisa Torres issued a ruling. The CryptoLaw founder added that the SEC will only indicate interest in a settlement “if Ripple gets a big victory.” Per Deaton, this will help SEC Chair Gary Gensler save face and help the agency secure a political win through the settlement.
XRP Community Members Seek Clarification
Meanwhile, Deaton’s remark that a settlement will only happen if Ripple gets a significant victory has led to a major question in the XRP community. Many are seeking clarification on why the leading Silicon Valley blockchain company would still want to settle with the securities regulator despite winning the lawsuit.
I have a stupid question y would ripple want to settle if they win big ..I would tell Gaaaaaaaary to hop a Huskey
— Jess (@curbmanjess) May 1, 2023
Responding to the question, attorney Deaton explained why Ripple might still want to settle with the SEC even after winning the case. Deaton noted that his previous analysis does not imply that Ripple would agree to the same settlement terms it would have agreed to two years ago.
Deaton shed more light on his previous tweets using rhetorical questions. Firstly, Deaton asked whether crypto exchanges like Coinbase and Kraken would immediately relist XRP or wait on the SEC to appeal the decision favoring Ripple.
Secondly, he also asked whether Bank of America would be comfortable with Judge Torres’ decision or wait to see whether her decision will be overturned when the SEC appeals.
Does Bank of America, a Ripple partner feel comfortable with the decision or wait to see if Judge Torres gets overturned if the SEC appeals her ruling.
Remember, the SEC can file a notice of appeal and withdraw it later.
— John E Deaton (@JohnEDeaton1) May 2, 2023
“If the SEC told Ripple it would issue a statement that all future sales of XRP are not securities (not saying it would) and not appeal if Ripple agrees to pay $50M, I believe the certainty and immediate return of liquidity to the U.S., makes @bgarlinghouse a check in seconds,” Deaton added.
Deaton asserted that it is a different story if Judge Torres rules in Ripple’s favor, because liquidity will return to the U.S., and businesses will not have to worry about annoying the SEC when they use XRP.
Hogan Doesn’t Think SEC Will Appeal
Meanwhile, Deaton’s colleague attorney Jeremy Hogan, a partner of Hogan & Hogan, had previously stated that the SEC would not appeal the decision if summary judgment is granted in Ripple’s favor.
As reported earlier, attorney Hogan believes an appeal filed by the SEC will not benefit the regulator. Hogan remarked that if the case goes to the Second Circuit in the Appellate Court and the SEC still gets an unfavorable ruling there, the decision will become a binding precedent.
Hogan believes it will affect the SEC’s chances of winning other cases against crypto companies in the future.
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